Breaking the EBIT ceiling – What recruitment can learn from other industries

For many in recruitment and staffing, growth has traditionally followed a well-worn path: more consultants equal more revenue. But as many agencies have discovered, this doesn’t scale profitably. NFI per consultant is a useful metric, but it comes with a ceiling that caps EBITDA around the 5% mark. But what if you could scale without linearly increasing headcount? The idea of breaking through the “glass ceiling” isn’t only unique to recruitment. Some of the world's most valuable companies have implemented and demonstrated how technology can transform traditional business models and become future proof whilst increasing the value of their business. Here are some other industries that have done it: Professional Services – from billable hours to scalable IP In consulting, law, and accountancy, the classic model was simple: sell time. However, many firms have now transitioned from pure time-based billing to scalable, repeatable products like dashboards, client portals, self-service tools, and knowledge automation. Recruitment firms can follow the same path by productising their services. Think about self-serve portals, or interview scheduling agents. These offerings add scalable value, create recurring revenue opportunities, and improve client stickiness without increasing headcount. Field service – scaling without adding headcounts Traditionally, field service businesses like utilities, facilities management, breakdown repair or logistics scaled by hiring more technicians and coordinators. Now, companies can identify problems before they occur, can dispatch parts to site faster, reduce site visits, and give clients real-time updates. They carry out more jobs, with fewer people – and at higher margins. Recruiters don’t need to manually manage every part of the process. Use technology to handle repetitive tasks, increase capacity and reduce errors. You’ll achieve more placements per consultant and higher margin per head. Manufacturing - Predictive, not reactive Manufacturers have long fought the margin squeeze, with small cost savings and efficiencies translating into big bottom-line improvements. Through connected systems, real-time dashboards and smart automation in their supply chains, many have leapt from single-digit margins to EBIT breakthroughs. Why wait for month-end reports or pipeline drops to take action? Let technology surface live performance dashboards for consultants, teams, or clients and spot trends before they become problems. Technology can predict pipeline gaps, conversion drops, or under-resourced vacancies and act in real time. Apple - Redefining consumer electronics Today, you cannot go about your day without coming across an Apple product. It has been reported that Apple’s market share in the U.S alone is 57.68%. Apple would not have been able to achieve such a feat if it wasn’t for them transforming themselves from a computer manufacturer into a lifestyle technology company by using and leveraging technology. Using technology, Apple fundamentally changed the music industry through iTunes and iPod, creating a new digital distribution model that made purchasing and listening to music more accessible. They also sparked a technological revolution with the iPhone, which not only defined the modern smartphone era but also created an entirely new economic ecosystem through the App Store, generating huge recurring revenue streams from both developers and consumers. Through technology, Apple was able to revolutionise the industry they’re operating in, as well as continue improving their products and services which has enabled them to achieve at the end of December 2024, a revenue stream of $395.76B, with growth of 2.61% year-over-year. Amazon: Beyond traditional retail Starting as a simple online bookstore, Amazon evolved into the one-stop-shop through its sophisticated logistics and automation systems. Allowing its users to purchase goods and services from the comfort of their own homes. A huge development came when Amazon transformed its internal infrastructure into AWS, which is now a dominant cloud computing platform. The company's implementation of AI and machine learning enabled personalised shopping experiences and efficient inventory management. Through leveraging technology, Amazon achieved unprecedented economies of scale that traditional retailers simply couldn't match. This positioned Amazon to become a leader in the e-commerce space. Your infrastructure is a potential advantage if it’s built on extensible, scalable technology. With AI-assisted sourcing, automated compliance, and intelligent workflows, recruitment businesses can grow margins and increase enterprise value. Microsoft: Pivoting to Cloud-First Microsoft's transformation under Satya Nadella shows how technology can further improve an already well-established business. Microsoft successfully pivoted from traditional software licensing to cloud-based subscription models, while developing Azure into a major cloud platform. By transforming Office into Microsoft 365 and integrating AI across its product suite, Microsoft created sustainable, recurring revenue streams while maintaining its competitive edge in the market. Microsoft reimagined its business model. Recruitment firms can do the same by building smarter operations. So what are the key lessons for recruitment firms? Here are the key lessons we can learn from how these tech giants have leveraged technology to achieve success and increase the value of their business:

• Embrace technology at the core of your business strategy, not just an add-on.

• Focus on scaling your business with technology, not by just increasing headcount.

• Invest in AI and automation to position yourself ahead of your competition.

Just as these companies revolutionised their industries by leveraging technology, recruitment businesses have the opportunity to transform their business models and break through the “glass ceiling.” The path to higher EBITDA can only be achieved by transforming your recruitment business from a traditional recruitment business to a tech-enabled or tech-led business. Get in touch to find out how Mercury can help you do that!